Informal organization is a social structure formed to cater to the social and cultural requirements of the individuals. Such organizations do not have systematised structure, as there is a complicated network of social relationships between employees.
Irrespective of the kind of formal organizational system, there will always be an informal organization existing in it. Such organizations originate through employees’ communication, their emotional and social requirements, and formation of social groups.
Advantages of Informal Organization
- To Employees
- Sense of Belongingness: It provides values with a sense of satisfaction and belongingness.
- Value for Emotional Problems: It provides value for emotional problems of the employees. Members of the informal groups value each other’s emotional problems and tensions.
- Helps in Unforeseen Situations: The individuals of informal group help each other in unforeseen situations like sickness or accidents.
- Innovation and Originality: Informal organizations provide the atmosphere required for personal originality and innovation. It also enables employees to mould their task structures, according to their individual needs.
- Social Control: Informal groups offer standards for right behaviour to employees, which need to be followed. Thus, it provides a social control that guides employees towards right behaviour.
- To Management
- Effective Communication: Informal organization emerges out to be an effective way of communication, when a definite path is not present. It is thus helpful in fast transmission of messages from one point to another.
- Fulfill Social Needs: Under informal organizations, individuals with same thinking and ideas make their own groups. Each of them acts as a support systems for each other in personal and organisational issues. This fulfils their emotional and social needs and thus benefits the management.
- Fulfils Organizational Objectives: Under informal organizations, subordinates do not hesitate before putting their thoughts and ideas in front of their seniors. This assists seniors to quickly identify and resolve business problems.
- Less Supervision: Supervisors and managers do not have constantly monitor the activities of informal groups, as these groups are self-controlled. Thus, the managers are relieved from their hectic supervision tasks.
- Aid to Management: Details obtained through informal systems help the manager to know what he has to do, as he timely receives feedback and work experience of every employee.
- Resistance to Change: Informal organizations are often tied with strict cultures, traditions and principles.
- Role Conflict and Sub-Optimization: Within informal organizations, each individual works towards the achievement of same goals. They often prioritize group goals before organizational goals, which adversely affect the organization.
- Rumour: Most of the times, informal organizations and groups give rise to rumours and gossips, which is undesirable.
- Resists Change: It tend to stick the old management techniques. They resist new transformations and changes.